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Talk of gathering the 100,000 signatures necessary to force the government into a referendum that might topple president Alejandro Toledo is reverberating through Peru as his popularity has sunk to its lowest level since he took office for a five-year term last July. Putting together those signatures would not be difficult if the well-organized university students movement-which once spearheaded Toledo's presidential campaign and are now increasingly disaffected were to take up the task.
Battered in recent months as Peruvians complain about his inability to make any headway towards fulfilling his campaign pledges of fighting poverty and creating jobs, which at that time gave him approval ratings in the 70s, latest polls show Toledo at around 15 percent and diving fast.
Breakouts from one of the most recent polls indicate that around 40 percent of Peruvians are disappointed as a result of his unmet promises and 17 percent deny him credibility, while more than 20 percent believe he doesn't know how to run the government.
The privatizations of deficit-ridden state companies was a cornerstone of Toledo's plan to guide Latin America's seventh-largest economy to growth, and are still seen as key to helping Peru grapple with issues like a budget deficit of 1.9 percent to 2.2 percent of gross domestic product.
But in the last few years these much-needed privatizations in several Latin American countries have acquired a bad reputation as government officials have often pocketed large sums under the table by steering a company's sale to a particular buyer, while frequently the funds produced from these sales were not employed for the proclaimed objectives of financing new and needed government endeavors and were instead used to plug fiscal deficits generated by mismanagement. Not surprisingly, privatizations have a bad image in Latin America and are seen with mistrust by public opinion.
Disregarding this background, Toledo plunged in his first two privatization efforts without first attempting to persuade Peruvians that they would be honest and well carried out. Neither did he try to quiet down concerns about the loss of employment that usually comes with privatizations. Instead, he tried to roll over public opinion with an attitude that was seen as authoritarian, if not dictatorial.
Under these circumstances, Toledo was bound to fail in his attempt to privatize two electricity generating plants, Egas in Arequipa, and Egesur in Tacna, two southern cities known throughout Peruvian history for their strongly independent attitudes-and fail he did. When opposition to the privatizations was expressed in both cities by general strikes and other movements-which polls showed had more than 70 percent popular support-instead of dealing with the conflict personally Toledo declared in both cities a 30-day state of emergency and a curfew, and sent over a commission headed by a Catholic bishop and one of his vice presidents. It was greeted with a salvo of stones in Arequipa, forcing Toledo to announce the suspension of the planned privatizations.
Personal problems are also hounding Toledo. A Peruvian court ruled last week that he must take a DNA test in August to establish if he is the father of a 14-year-old girl in a high-profile paternity suit that has been going on for months. Her mother, Lucrecia Orozco, has been pushing for Toledo to take the test to establish whether or not he is the father of her daughter Zarai. She wants him to legally recognize the girl.
While previous blood tests determined 97 percent certainty of Toledo's paternity and he has admitted to a relationship with Orozco in the 1980s when he was estranged from his Belgian wife, he denies he is the girl's father.
Meanwhile, Toledo is dealing with his political difficulties by trying to establish a bridge with Alan Garc’a, the candidate he defeated a year ago, and his leftist APRA party. But this backfired last week when his foreign minister, greatly respected Diego Garc’a Sayan, resigned in anger as it became known that Toledo was negotiating with Garc’a the appointment of Allan Wagner, his foreign minister when he was president between 1985 and 1990, to take up this job in the present cabinet-or even that of prime minister.
There are indications that, as part of a restructuring of the cabinet that will cover about half of the ministries, economy minister Pedro Pablo Kuczynski, a former Wall Street investment banker who is trusted in foreign financial circles and whose credibility has been vital for attracting foreign investors but whose policies have been harshly criticized by the opposition, will be dumped by President Toledo to satisfy the populist left ahead of the November parliamentary elections.
Uncertainty over Toledo's future has led the World Bank to postpone discussion of a $100 million loan for Peru until September. It is the second time discussion of the loan by the World Bank's decision-making executive board has been postponed. The loan was originally scheduled for discussion in late June but was postponed until August, and its funds would be used for a project to help build a much-needed social safety net for the country.
Claudio Campuzano (claudio-campuzano@hotmail.com) is U.S, correspondent for the Latin American newsweekly Tiempos del Mundo and editorial page editor of the New York daily Noticias del Mundo. He writes weekly for World Tribune.com
